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To: Jeffrey S. Mitchell who wrote (2175)	11/30/2001 3:05:49 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 11/29/01 - [HITT] Hitsgalore Sued for Fraud by SEC Over Press Releases Hitsgalore Sued for Fraud by SEC Over Press Releases (Update1) By David Evans Los Angeles, Nov. 29 (Bloomberg) -- Hitsgalore.com Inc.'s market value tripled to $1 billion in 1999 after the Internet search-engine company falsely claimed it received $110 million in financing from a charitable trust, the Securities and Exchange Commission alleged in a fraud lawsuit. The SEC yesterday also sued former Hitsgalore.com President Stephen J. Bradford, the Life Foundation Trust of Scottsdale, Arizona, and Jeanette B. Wilcher, its administrator, in U.S. District Court in Los Angeles. The SEC asked the court to order the trust to give up $1 million received from the sale of Hitsgalore.com shares. Life Foundation Trust and Wilcher were accused of taking part in the fraud. She couldn't immediately be reached to comment. The SEC alleges that Hitsgalore.com, now called Diamond Hitts Productions Inc., issued the false releases in April and May, 1999. The press releases, written by Bradford, said the trust would be a long-term investor in the company, buying $10 million of stock and agreeing to invest another $100 million. Although Hitsgalore.com's statements said the trust would pay for the stock immediately, no payment was ever received, said SEC attorney Nicholas Morgan. ``Life Foundation sold most of its Hitsgalore shares within weeks of the press releases at a profit of $1 million,'' said Morgan. Settlement Hitsgalore.com and Bradford agreed to settle the charges without admitting or denying any wrongdoing, the SEC said. They agreed not to violate securities law in the future. ``He looks forward to getting this matter behind him,'' said Brad Bennett, Bradford's attorney. From the time of the first press release, on April 16, 1999, to the third, on May 10, Hitsgalore.com shares soared from $6.31 to an all-time high of $20.69. The shares closed today at 12/100 of one cent. At the time, Bradford said in an interview that the trust had assets of more than $1 billion and engaged in ``educational, medical and biblical projects.'' The trust was attracted to Hitsgalore.com because of its Internet search engine that filtered out pornographic sites, he said. The trust was actually a for- profit company, benefiting Wilcher's children, said Morgan. Hitsgalore.com shares plummeted 53 percent on May 11, 1999, the day after the third press release, after Bloomberg News reported the company hadn't disclosed that its founder was accused by the Federal Trade Commission of cheating customers in a prior Internet business. In October, 2000, a federal judge in Los Angeles dismissed a $500 million libel suit filed by Hitsgalore.com against Bloomberg LP, the owner of Bloomberg News, and ordered the company to pay Bloomberg's legal fees. Hitsgalore.com had no ``revenue-generating activities'' in the first nine months of 2001, when it lost $1.7 million. The company's net worth was negative $4.5 million as of Sept. 30. ©2001 Bloomberg L.P. All rights reserved.